Capital Markets Examiner School, Providence, RI

Large Banks-Liquidity Categories

 Liquidity Coverage Ratio – for banks greater than $50 billion  a ratio to cover 30 days of liquidity with internal bank assets

 Net Stable Funding Ratio (NSFR) – for banks greater than $50 billion  available amount of stable funding required to exceed the required amount of stable funding for a one-year period of extended stress

 Both LCR and NSFR are modified for banks below $250 billion

Complexity

 Beyond the regulatory approaches, what is “Complexity”

 Non-traditional asset classes?

 Optionality?

 Derivatives?

 The shift from complex to non-complex is a function of experience, risk identification, risk management, and governance  Is complexity a function of management skill and depth